TAG Consulting


Nordstrom or Costco – What Is A Healthy Culture?

In our book, the main character –  a chef named Gage Fabre – is famous because of his mole sauce. His delicious creation is a fusion of the Southwestern influences of his childhood along with French culinary techniques and Latin American influences.

Culture works like these influences—the often unseen yet all-important forces that make a pedestrian dish something worthy of being called a “secret sauce.”

Here’s our key question: if an effective leader develops and maintains a healthy culture, and a healthy culture helps lead to success, what exactly IS a healthy culture?

Walk into Nordstrom’s, and you experience something. Immaculate surroundings, tasteful yet stylish clothing displayed perfectly, perhaps a skilled pianist playing at just the right volume to enhance the shopping experience while not drowning out conversation.  Nordstrom’s customer service is legendary, its environment is understated elegance, and its prices . . . well, pricey.

Walk into Costco, and you experience something else entirely. You feel as if you have stepped into an airplane hangar as you survey row after long row of plain shelves and fixtures bolted to the concrete floor. There is a bewildering array of merchandise, from ice scrapers to industrial vacuum cleaners, to plastic vats of Jolly Rancher candy, to pots and pans, to a surprisingly intelligent wine selection.

There is no piano player at Costco, no understated elegance, nothing that Nordstrom has. But there is one big thing that Nordstrom does NOT have—amazingly low prices!

Nordstrom and Costco are both retail operations  but their cultures could not be more different. Nordstrom is all about fine goods presented by way of exemplary customer service in a soothing and classy environment. Costco is all about discount prices on middle-of-the-road goods presented in an industrial warehouse the size of several football fields.

Both companies are wildly successful, in spite of their very different cultures.

Costco is proud that its culture is about being a high volume, low-priced warehouse where the customer basically serves herself. Nordstrom prides itself in catering to the customer’s every whim. But behind the scenes, both companies go out of their way to take care of their employees, understanding that employee retention is critical to the bottom line.

You see, there is not one right or wrong organizational culture. The only questions are whether the culture you have is the right one for you, and whether it is a healthy culture.

What do you think? Is your organizational culture healthy? How do you know?